FOREX Tech Targets

EUR/USD: Neutral (since 05 Mar 18, 1.2335): Mild upward pressure has eased, EUR trading in a range for now. The critical 1.2425 resistance indicated in recent updates remains intact as EUR staged a relatively sharp decline yesterday after touching a high of 1.2400. While the ‘key support’ at 1.2310 is still intact (overnight low of 1.2327), the weak daily closing in NY is enough to indicate that the recent mild upward pressure has eased (we previously expected the short-term strength to extend further to 1.2425). However, there is no change to the neutral outlook but from here; it appears that EUR has moved into a consolidation phase. Near-term, the bias is tilted to the downside but any weakness is viewed as part of 1.2260/1.2400 sideway trading range instead of a sustained decline.

GBP/USD: Neutral (since 07 Mar 18, 1.3895): GBP under pressure, further weakness seems likely.

We highlighted yesterday that the “near-term bias is for a probe lower towards the bottom of the expected 1.4080/1.4320 consolidation range” but the subsequent price action is anything but a ‘probe’ as GBP plummeted to an overnight low of 1.4069. While the outsized decline over the past few days has shifted the immediate pressure to the downside, we are not convinced that the current weakness is the start of a bearish phase. That said, the weak undertone could lead to further down-move towards 1.4000 (with lower odds for extension towards the month-to-date low of 1.3965). All in, we expect GBP to stay under pressure from here unless it can reclaim 1.4200.

AUD/USD: Neutral (since 22 Mar 18, 0.7770): AUD has moved into consolidation phase.

We noted yesterday that “in order to maintain the current fledgling momentum, AUD has to make a run for the upside soon or the odds for a stronger rebound would diminish further”. While AUD managed to touch a ‘fresh’ high of 0.7813, the major 0.7825 resistance was unthreatened. All that said, the subsequent sharp decline from the high came as a surprise. The 0.7720 ‘key support’ was tested overnight (low of 0.7720) but the weak daily closing in NY is enough to indicate that the recent mild upward pressure has eased. For now, there is no change to the neutral outlook and AUD is deemed to have moved into a consolidation phase. Near-term, the bias is on the downside but for now, we view any weakness as part of a 0.7645/0.7785 consolidation range and not the start of sustained decline.

NZD/USD: Neutral (since 05 Feb 18, 0.7280): A deeper down-move towards 0.7190 seems likely.

Our recent expectation for consolidation was proven wrong as NZD plunged to a low of 0.7260 yesterday. The rapid pick-up in downward momentum has shifted the immediate pressure to the downside. From here, a deeper down-move towards 0.7190 would not be surprising but at this stage, a break of last month’s 0.7155 low seems unlikely. Overall, NZD is expected to remain under pressure unless it can reclaim 0.7330.

USD/JPY: Neutral (since 21 Feb 18, 107.35): USD is expected to trade sideways.

There is not much to add as USD traded in a relatively quiet manner over the past few days. We continue to hold a neutral stance and expect USD to trade sideways. The shorter-term undertone has improved somewhat and this could lead to a test of the top of our expected 106.20/107.90 consolidation range but at this stage, it is premature to expect a sustained up-move.

Source:efxdata.com